Foreigner would be allowed to trade shares on the Yangon Stock Exchange (YSX) after October

Foreigners will only be able to trade shares on the Yangon Stock Exchange (YSX) after October, U Thet Tun Oo, executive manager of the bourse, told The Myanmar Times.

This is in spite of the Security Exchange Commission of Myanmar (SECM) announcing on July 12 that foreigners would be allowed to trade on the YSX but without specifying the date.

YSX executive manager U Thet Tun Oo told The Myanmar Times that while the SECM has agreed in principle to allow foreign participation, details still need to be ironed out and that will take about three months. The actual date for foreign participation will be announced by the YSX.

The Myanmar Companies Law allows foreign individuals and entities to hold up to a 35 percent minority stake in Myanmar companies without those firms losing the domestic registration required to be listed. To date though, the authorities have not implemented this law.

Currently, only local investors are allowed to buy and sell shares on the YSX, however, their numbers are insufficient to generate liquidity. There are only five companies listed on the stock exchange with a combined market capitalisation of US$400 million since its launch in March 2016. Consequently, trading on the bourse has been lackluster, with the average daily trading volume just over K46 million over the past year. 

To drum up more activity on the YSX and lure more foreign capital into the country, U Thet Tun Oo said more effort must be made to attract foreign investors. “There are a few foreign investors who are interested but not many. The stock market is relatively new and we will need to hold more roadshows and discussions both locally and abroad to reach out to investors,” he said.

Earlier this month, Tokyo-headquartered investment bank Daiwa Securities Group also seeded a US$30 million Daiwa Myanmar Growth Fund, a venture capital fund in Myanmar with a mandate to invest in local start-ups and prepare them for initial public offerings on the YSX in the future. 

Daiwa Securities also jointly manages the YSX together with the Myanma Economic Bank and the Japan Exchange Group. The fund will provide growth-capital to private firms by taking minority stakes of 10-30pc, focusing on consumer goods as well as services, telecommunications, infrastructure and logistics industries.  

Meanwhile, U Thet Tun Oo said the low number of listed companies has been a contributing factor in the lack of interest in the local stock exchange. “The YSX is planning to attract more companies to list by relaxing some restrictions,” he said. – Translated

(The Myanmar Times: https://www.mmtimes.com/news/foreigners-only-able-trade-after-october-ysx-says.html )

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